China home builders face longer payment delays: CS

ChrisOliver

HONG KONG (MarketWatch) -- In the latest sign of distress in China's housing market, more Chinese construction companies reported delays in getting paid for work on behalf of property developers, identifying the issue as their biggest business concern, according to a survey by Credit Suisse released Friday. Of mainland China construction companies surveyed, about 80% were experiencing delays in getting paid for their work. A majority said the payment lags were the same or getting longer than three months ago. Home builders also said they were being asked to further slow down the pace of work on projects already underway, compared to three months ago. Builders were also being asked to increase upfront payments toward overall construction costs. Credit Suisse said the squeeze on developers' cash flow would come under further pressure amid tight credit and a sluggish sales environment. "We believe the China property market correction is just beginning," wrote Credit Suisse analysts in Hong Kong.

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